E.ON Czech Republic

SAP Data Archiving, Document Management, Accounts Payable Solution

Basic goal of E.ON was to increase the speed and quality of supplier and customer invoice liquidation process including work with print reports. Connection of the workflow possibilities, document management, optical documents archiving, and utilization of the standard financial module and an overlying solution for invoices liquidation formed an integrated process of invoices liquidation in SAP R/3. The entire process is fully transparent and it suits the needs of the company and its employees.

Organization

Transformation of Czech power industry into E.ON concern (E.ON Czech Holding AG respectively) commenced in 2001. E.ON took a majority share in regional utilities – among others in Jihočeská energetika a.s. Today, the company ensures majority of electricity distribution in the Czech Republic and it serves 1.4 million customers. E.ON is the biggest foreign investor on the Czech electricity market and it also has significant shares in gas trading companies.

Situation

The main goal of E.ON Česká republika, a.s. (Jihočeská energetika a.s. - JČE) was to use optical documents archiving to increase the quality and speed of supplier invoice liquidation, which also covered sixteen regional branches of the company. Other items of the project comprised; archiving of documents relating to customer invoices issued in SAP financial module (both original and supporting documents), archiving of print reports, and archiving of bulk printed financial documents (this project is described in a separate case study due to its specific character – author’s note).

Solution

A two-level project organization with steering and executive committee was chosen. IXOS Software (the company has transformed into IXTENT s.r.o. – author’s note) acted as a subcontractor for the company is:energy, contracting for JČE. Representatives of the company management, expert guarantors, as well as end users were involved in the implementation. Once the functional solution prototype was available and tested by the users, its functionalities were extended depending to the specific needs and conditions in JČE.

120 users were trained in using the solution within the framework of the end users training. Thanks to the preparation of the end users, it was possible to switch smoothly to the mass production on day “D” and with radical impact on the users (method of accounting, organization and method of supplier invoices approval process, billing organization) without parallel running of the old and new solution. Active cooperation between project teams and project management ensured implementation adherence to the project during the entire period of four months.

Key Points in the Project

An essential point in successful project implementation was to adopt the target solution concept (SAP R/3 interconnection with IXOS optical archiving). A consequence of this was the decision about changing the supplier invoice accounting method in FI and MM modules of SAP R/3. Until then, two separate accounting documents had been created from each single supplier invoice – supplier accounting inclusive of VAT and additional accounting of the costs. Decision about uniform (centralized) reception and archiving of supplier invoices in the whole company and a similar decision about central archiving of issued invoices required establishment of two independent scanning workplaces. Possibility of mutual substitution has been preserved for emergency cases. Sufficient network capacity (2 Mb/s) for access to the archive server with the documents enabled installation of one archive server. Hardware supply was the start of the document management and archiving system installation, and it enabled IXOS Software to commence with its implementation works. During the solution setup phase, it was important to divide the competencies of accountants from individual accounting departments, to determine the mandatory approval steps for individual document types, and method of user notification of an approval process item through MS Outlook. Considering the method of the implemented solution startup, it was decided to train all users. Company directives were established in order to ensure organizational changes required for utilization of the processes involving optical archiving of the documents.

Solution Description

Interconnection of the workflow possibilities, documents archiving and management, standard financial module, and the overlying solution for invoice liquidation have produced an integrated process for invoice liquidation in SAP R/3 to suit the company’s needs, which is fully transparent and provides the users with confidence that they can find anything they need at any time.

At the beginning of the process, invoices are provided with a label bearing a bar code at the central scanning workplace. They are scanned-in, archived, and the received invoice type is specified. A work item is created and it is addressed to the specified recipient’s mail in the SAP R/3 system. Item reception is also communicated to the user by a message in MS Outlook, which is only the case of the users who do not work with the system regularly. This minimizes the time gap between transfer and processing by the next person in the process. In the next step, the item is processed by the recipient. This step differs according to his/her role in the liquidation process – accountant, approver, or coordinator. This takes place exclusively in the electronic form, independently from the location.

The basic principle of each step consists of work item processing, i.e., electronic viewing of the invoice and starting the defined activity in SAP R/3 specific to the invoice type.

In the first step, the accountant establishes so called “electronic folder” with supplier’s accounting data and with necessary supporting documents for costs breakdown for approval steps, which can be complemented by notes as required. At the same time, this data is automatically transferred into SAP R/3 financial module. From this moment, all authorized users in the system are permanently able to access the data about the obligation towards the supplier, current approval status, history of each step, who is currently processing (or delaying) the document, and what does the original invoice look like. Once the establishment step is completed, the item is sent for further processing, usually for the approval step.

The scope of permitted activities of the approver was set according to the customer’s requirements. There are several types of approval steps and they were defined according to the invoice type and user’s role in the approval process. The approver, having its assigned role in JČE, uses buttons to approve or reject the invoice and he/she can also add his/her comments to the costs breakdown. The item circulates among the approvers until it reaches all mandatory approval levels. Otherwise the invoice cannot be posted into the financial module.

At the end of the approval process, the work item is delivered to the specified accountant for the final step – accounting document posting. The work item is then terminated and the processing ends. Later user access to the data from the approval process and electronic viewing of the original invoice are possible by several means.

Archiving of other additional documents and their linking to the accounting document in SAP R/3 can be performed at any time after the end of the invoice liquidation.